U.S. Announces Trade Deal with India, Cutting Tariffs to 18%
President Trump has announced that the United States will reduce tariffs on India to 18% after the two nations agreed on a trade pact that would see India reduce tariff and non-tariff barriers on U.S. products. This development marks a significant benefit for U.S. leather exporters, who supply 30-40% of the world's trade in hides.
Zero-Tariff Access Transforms Export Economics
The agreement's most important element for the leather industry is India's commitment to move toward zero tariffs on American goods as part of the framework announced on February 2, 2026. U.S. exports of high-quality HS 4101(Raw Hides) and HS 4104 (Wet-Blue/Crust) are designated for "Immediate Liberalization" tracks, fundamentally changing the cost for Indian manufacturers. American raw materials will now be competitive with, or even cheaper than, supplies from South America or Europe, which have historically dominated the Indian market due to India's protective tariffs and complex para-tariff structures.
Creating a Circular Trade Model
The dealenables a powerful "circular trade" dynamic. U.S. tanneries can now export high-quality semi-processed hides (HS 4104) to India, where manufacturers use lower labor costs to finish and produce leather goods including footwear and upholstery. These finished products then return to the U.S. market at the new 18% tariff rate—significantly lower than the 50% duty that has challenged exporters in recent months.
This framework positions U.S. leather suppliers to capture the "upstream" value of India's expanding manufacturing sector. Previously, Indian tanneries were incentivized to source local or cheaper imported hides. By lowering entry costs for U.S. HS 4104 products, American exporters can become the preferred suppliers for India's "Make in India" initiative.
Synergy with India's Domestic Reforms
The timing coincides favorably with India's 2026 budget announcement reducing tariffs on raw materials and capital goods to boost domestic manufacturing. These customs duty reforms are central to India's strategy to reach ambitious export goals and diversify from dependence on Chinese markets. India's leather and textile sectors stand to benefit significantly from both domestic and bilateral measures, creating a favorable environment for increased U.S.-India trade in the years ahead.
EU-India Trade Agreement: Implications for the Leather Sector
The European Union and India recently concluded negotiations on a comprehensive trade agreement that carries significant implications for the global leather industry. The deal, which aims to deepen economic ties between the two partners, includes provisions for tariff reductions on leather and leathergoods.
Competitive Pressure on U.S. Exporters
The EU-India agreement creates a more competitive environment for American leather suppliers. European tanneries, particularly those in Italy, Spain and Germany,have long been major suppliers of premium hides and semi-finished leather to Indian manufacturers. With preferential tariff treatment under the new framework, EU exporters may gain a pricing advantage over their American counterparts in categories where the U.S.-India deal has not achieved zero-tariff status.
Strategic Response: Quality and Service Differentiation
However, U.S.suppliers retain competitive advantages that extend beyond tariff rates. American hides are widely recognized for their superior quality, consistency and traceability, attributes that command premium positioning in global markets. The U.S. industry's investments in sustainable processing methods and supply chain transparency align well with the growing demands of conscious consumers in both India and re-export markets.
Mexican President Meets Auto CEOs as Sales Hit Records, Exports Slip
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U.S.Cattle Inventory Hits 75-Year Low
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By the numbers: The total cattle and calves inventory fell 0.35% year-over-year, down to 86.2 million head of cattle. This marks the lowest cattle inventory in the United States since 1951.